Pre-deposit waiver for a sick industrial unit was granted, with undertaking in lieu and interim protection pending appeal.

A sick industrial unit declared by the Board for Industrial and Financial Reconstruction was not required to make a cash deposit or furnish a bank guarantee as a condition for hearing the appeal, because the protection available under the Sick Industries (Special Provisions) Act, 1985 justified waiver of pre-deposit. In lieu thereof, the company's authorised representative was directed to give an undertaking to satisfy the adjudicated dues if the appeal failed, and interim protection was granted by restraining disposal of the confiscated plant and machinery and interference with normal production until the appeal was decided.

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Issues: Whether a sick industrial unit could be required to make a cash deposit or furnish a bank guarantee as a condition for hearing the appeal, and what interim protection was warranted pending disposal of the appeal.

Analysis: The unit had been declared sick by the Board for Industrial and Financial Reconstruction. In view of the protection available to a sick unit under the Sick Industries (Special Provisions) Act, 1985, cash deposit or bank guarantee was not insisted upon. Instead, the authorised representative of the company was directed to furnish an undertaking that the adjudicated dues would be met if the appeal failed. The department was also restrained from disposing of the confiscated plant and machinery and from interfering with normal production until the appeal was decided.

Outcome: The pre-deposit requirement was waived, an undertaking in lieu thereof was directed, and interim protection was granted to the appellant pending disposal of the appeal.

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